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Theravance, Inc. (THRX)

Q4 2012 Earnings Conference Call

February 12, 2013 5:00 pm ET


Michael W. Aguiar – Senior Vice President and Chief Financial Officer

Rick E. Winningham – Chairman and Chief Executive Officer


Steve Byrne – Bank of America

Stephen Willey – Stifel Nicolaus

Kyle Rasbach – Cowen & Company

Alan Sonnenfeld – Bernstein

Howard Liang – Leerink Swann



Ladies and gentlemen, good afternoon. At this time, I’d like to welcome everyone to the Theravance Conference Call to review results for the Quarter Ended December 31, 2012. During the presentation, all participants will be in a listen-only mode. A question-and-answer session will follow the Company’s formal remarks. (Operator Instructions)

I will repeat these instructions after management completes their prepared remarks. Today’s conference call is being recorded.

And now, I would like to introduce your host for today’s conference, Mike Aguiar, Senior Vice President and Chief Financial Officer. Please go ahead, sir.

Michael W. Aguiar

Good afternoon, everyone, and thank you for joining us. With me on the call today is Rick Winningham, our Chief Executive Officer. First, Rick will review highlights from the quarter and then I will review our financial results. Following our comments, we will open up the call for questions.

Earlier today Theravance issued a press release detailing third quarter 2012 financial results and recent corporate developments. A copy of the press release can be downloaded from our website or you can call Investor Relations at 650-808-4100 and we will be happy to assist you.

Before we get started, we’d like to remind you that this conference call contains forward-looking statements regarding future events and the future performance of Theravance. Forward-looking statements include anticipated results and other statements regarding Theravance’s goals, expectations, strategies and beliefs. These statements are based upon the information available to the company today, and Theravance assumes no obligation to update these statements as circumstances change.

Future events and actual results could differ materially from those projected in the company’s forward-looking statements. Additional information concerning factors that could cause results to differ materially from our forward-looking statements are described in greater detail on the company’s Form 10-Q and Theravance’s perspective supplement filed with the SEC.

I will now turn the call over to Rick Winningham, our Chief Executive Officer. Rick?

Rick E. Winningham

Thanks Mike. Good afternoon, everyone. 2012 was an important year for Theravance, during which we made significant progress across our key programs. As important as 2012 was, however, multiple potential regulatory events for our respiratory programs in 2013 make it even more significant in the evolution of the company.

2013 will be a transformative year for us. If our respiratory programs partnered with GSK are approved and launched, we expect the company to experience significant revenue growth over the next several years.

Let me begin my review of 2012 with our respiratory portfolio partnered with GSK. GSK and Theravance are developing a portfolio of inhaled medicines for the treatment of both asthma and Chronic Obstructive Pulmonary Disease or COPD.

The portfolio has the potential to be the most comprehensive in the industry. Our pipeline, includes single mechanism, dual mechanism and triple mechanism therapies, all delivered by a common inhaler. If we are successful these products will be able to treat a wide range of patients with COPD and asthma who have different needs and different severities of disease.

The respiratory markets we are targeting with our GSK collaboration represent a very significant commercial opportunity. In 2012, reported sales of twice a day medicines containing a long-acting beta agonist combined with an inhaled corticosteroid totaled over $11 billion worldwide. In addition, EvaluatePharma estimates that 2012 sales of the once-a-day long-acting Muscarinic Antagonist Tiotropium would be approximately $4.6 billion.

Looking forward, we expect these markets to continue to grow based on decision resources, the total number of patients treated for COPD and asthma is expected to be driven by growth in the COPD segment.

RELVAR or BREO, our lead respiratory program is a dual mechanism medicine that combines the anti-inflammatory activities of an inhaled corticosteroid and the bronchodilatory activities of a long-acting beta agonists. This investigational medicine is intended for the treatment of both COPD and asthma. The global registration process with RELVAR or BREO was well under way. In the U.S. the new drug application for BREO in COPD will be reviewed by the FDA’s pulmonary allergy drug advisory committee in less than a month from now on March the 7th.

The GSK Theravance team is diligently preparing for this important event, and we look forward to presenting the complete dataset. As a reminder, the Prescription Drug User Fee Act goal date was confirmed as May 12, 2013 for BREO in COPD. Outside the United States, marketing applications for RELVAR have been filed in the EU and a number of other countries. We’re also pleased with the progress of ANORO, our second respiratory program with GSK. ANORO is a dual mechanism medicine for the treatment of COPD that combines 2 bronchodilators, a long-acting muscarinic antagonist and a long-acting beta agonist.

In the fourth quarter of 2012, GSK and Theravance announced the submission of the NDA to the FDA, and last month GSK submitted the regulatory application to the European medicines agency. I’m pleased to report today that the marketing authorization application for ANORO was recently validated by the EMA. Regulatory submissions are planned in other countries during the course of 2013.

GSK and Theravance also have a goal of combining three mechanisms in a single inhaler, which maybe important for patients with severe COPD and asthma as was highlighted at the ERS 2012 meeting in Vienna.

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